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Calculate the value for each

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Question - Coffee Corporation is considering two alternative capital structures. The EBIT considered will be $200,000 and a Tax rate of 21%.

Alternative1: Capital structure is $500,000 of Long-Term Debt, 14,000 shares of Common Stock. The required rate of return on equity is 10% and 8% of Interest on Debt

Alternative2: Capital structure is $350,000 of Long-Term Debt, 23,000 shares of Common Stock. The required rate of return on equity is 8% and 7% of Interest on Debt

Required -

1. Calculate the EPS for each.

2. Calculate the value for each.

Reference no: EM133073329

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